By Bankole Thompson
The International Monetary Fund, the leading lending agency responsible for ensuring the financial stability of the world, has been the subject of criticisms and protests for years. Accused of being at the beck and call of the global elites, the IMF annual meetings in Washington D.C., are a scene for demonstrations by various interest groups and ordinary people. Others view the IMF as nothing more than a central part of a global hegemony that ignores poverty and dictates to nations how they should conduct their own business in determining their financial wellbeing.
As inequality persists around the world, the issue about whether the IMF would take on poverty as a top agenda is more pressing now as a new leader takes the helm of the behemoth organization. Kristalina Georgieva delivered her first address as president of the IMF during its annual meetings in the nation’s capital this weekend. Her speech did not lay out any ideological convictions or particular direction that she wants to take the IMF into regarding inequality, even as Oxfam International reported earlier this year that billionaire fortunes have increased by 12 percent in 2018 – $2.5 billion a day- while $3.8 billion people who “make up the poorest half of humanity saw their wealth declined by 11 percent.”
The report, “Public Good or Private Wealth,” was released ahead of the 2019 World Economic Forum in Davos.
“The size of your bank account should not dictate how many years your children spend in school, or how long you live – yet this is the reality in too many countries across the globe. While corporations and the super-rich enjoy low tax bills, millions of girls are denied a decent education and women are dying for lack of maternity care,” said Winnie Byanyima, executive director of Oxfam International.
Even though Georgieva, the 66-year-old Bulgarian economist, who studied at the Karl Marx Higher Institute of Economics in Sofia, and later at the London School of Economics, has yet to lay out an anti-poverty mandate for the IMF, she has not been reluctant to the discuss the issue.
“We have a significant and unfortunately growing number of countries where the trending poverty is going in that wrong direction. We ought to be more concentrated on the urgency to understand these drivers of poverty and the urgency to bend the curve so it is not in that direction,” Georgieva, told students at George Washington University in April of this year.
Joseph Stiglitz, the Nobel Prize-winning economist told the Progressive magazine in 2011, that the IMF governance structure is problematic in addressing the needs of underserved communities around the world. The United States remains the largest financial contributor to the organization.
“Finance ministers and central bank governors have the seats at the table, not labor unions or labor ministers. Finance ministers and central bank governors are linked to financial communities in their countries, so they push policies that reflect the viewpoints and interests of the financial community and barely hear the voices of those who are the first victims of dictated policies,” Stiglitz said.
This year’s Nobel Prize in Economics was given to three anti-poverty researchers underscoring how inequality can no longer be ignored by the political and economic establishment. Abhijit Banerjee and Esther Duflo from MIT and Michael Kremer from Harvard University were awarded for their innovative work about how to fight global poverty.
It is a moral imperative for Georgieva, the IMF’s new boss and one of the most powerful people in the world today to move in the direction of supporting policies that will evidently reduce poverty and not the opposite. With $1 trillion in resources, the IMF, can champion anti-poverty policies, fight gender inequality and other issues that disempower disadvantaged communities.
Bankole Thompson is the editor-in-chief of The PuLSE Institute, the anti-poverty think tank headquartered in Detroit. He is a twice-a-week opinion columnist at The Detroit News.